China Strikes Back at U.S. Chip Sanctions with Gallium Export Ban

In response to the Biden administration’s most sweeping package of semiconductor-related sanctions to date, China has delivered a sharp counterstrike. The U.S. Department of Commerce has blacklisted 140 Chinese companies, primarily targeting those involved in designing and manufacturing lithography equipment for advanced semiconductors.

China wasted no time in responding. According to Reuters, within 24 hours, President Xi Jinping’s government announced a ban on exporting critical minerals to the U.S., including gallium, germanium, and antimony. These elements are indispensable for the semiconductor industry and have crucial applications in military technologies and advanced materials.

Gallium, Germanium, and Antimony: China’s Strategic Leverage

The U.S. sanctions went into effect on Monday, and China’s retaliatory export ban followed on Tuesday. The move underscores China’s willingness to use its dominant position in critical mineral production as leverage in its escalating trade and technology war with the U.S.

This isn’t China’s first move in weaponizing its control over vital resources. In December 2023, Beijing restricted the export of rare earth processing technologies to safeguard its strategic interests amidst growing tensions with the West. Now, by targeting gallium, germanium, and antimony—elements in which China dominates global production—Beijing has dealt a significant blow to U.S. supply chains.

These materials are critical for manufacturing semiconductors, infrared optics, and other high-tech products. The new export restrictions are likely to exacerbate existing challenges in global supply chains. The U.S. is particularly vulnerable, as its sole nickel mine is projected to run out by 2028, leaving the country increasingly reliant on imports. A White House spokesperson stated that the administration is reviewing China’s new restrictions and is prepared to take “appropriate action” in response.

China produces nearly 98.8% of the world’s gallium, 59.2% of germanium, and 48% of antimony. Experts see the move as a significant escalation in the ongoing U.S.-China trade war. “The move is a considerable escalation of tensions in supply chains where access to raw material units is already tight in the West,” Project Blue co-founder Jack Bedder said. “It comes as no surprise that China has responded to the increasing restrictions by American authorities, current and imminent, with its own restrictions on the supply of these strategic minerals,” Peter Arkell, chairman of the Global Mining Association of China, stated. “It’s a trade war that has no winners,” he concluded.

Image | fdecomite

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